EJA welcomes the announcement today by the Albanese Government to wipe almost half of Australia’s social security debt backlog, and roll out resolution payments of up to $600 for those impacted by income apportionment.
EJA has long been advocating for a change in the threshold for waiving small debts and fully supports the Government’s announcement today that the threshold for waiver will be increased to $250.
“This is a game-changer for many thousands of people who have received small, usually accidental debts, which still have a significant impact for those living week to week on income support. The complex appeal process for a small debt is the same as that for a larger debt so this decision will remove a lot of unnecessary stress from people’s lives.” says Economic Justice Australia (EJA) CEO Kate Allingham.
Income apportionment was a method previously used by the Department of Social Services (DSS) to recalculate alleged overpayments, by averaging income over weeks that do not align with the Centrelink reporting period. A Commonwealth Ombudsman report from 2023 found the methodology used unlawful, calling into question the validity of dozens of criminal prosecutions and tens of thousands of debts.
Since the issue was discovered, the extent of the problem has been found to be much greater, affecting approximately three million Australians.
“While it would have been our preference that the Government waive all current debts calculated via income apportionment, the decision today is a genuine attempt to deal with a really complex issue” says Ms Allingham.
“It is important that people seek legal advice to assist with applying for resolution payments, and that people are aware they can still appeal these income apportionment debts for which they should also seek legal advice. We are grateful for the announcement of $400,000 funding to Economic Justice Australia today but note that our member centres, community legal centres that specialise in social security law, are already at capacity.”
The Robodebt Royal Commission, of which the partial purpose was to ensure a similar disaster never happened again, recommended increasing funding to social security legal services to protect against future instances of harm and misconduct. Since then, and in the absence of any sufficient funding injection from Government, cascading scandals have continued to prove this need – at great cost to millions of Australians.
“Centrelink debts can significantly reduce people’s already meagre payment. The fact an unlawful system has been allowed to continue unchecked for decades underpins what was found in the Robodebt Royal Commission, which is that the Government needs to adequately fund social security legal services that assist people in navigating these issues. Millions of people have already been affected by successive Governments’ proven inability to do so themselves,” says Ms Allingham.
EJA urges the Government to use this opportunity of new legislation to include a 6-year limitation on debt recovery as recommended by the Robodebt Royal Commission as this would go even further to deal with the backlog of debts dating back years.
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Media contact: Kate Allingham | 0435 075 085 | kate@ejaustralia.org.au